Individuals face financial and reputational threats from cybersecurity failures and cybercrime. While the company that leaked your data may offer some financial help, much of the losses you face from hackers will come from your own assets. 

Personal cyber insurance may be a wise addition to your homeowners or renters insurance policy. Let’s look at some of the scenarios you could face.

ID theft

One of the primary ways cybercriminals harm individuals is through the unauthorized use of personal data. This data is often stolen from merchants, health care providers, personal computers or mobile devices. Once cyber thieves steal your data, they sell it on the internet. 

Such data can be used to open credit accounts in your name or even buy houses or cars. This can affect your ability to borrow. And rectifying the problem is expensive and time-consuming. You could end up paying to reproduce financial records, hire an attorney or take time off of work.

If a business leaked your personally identifiable information (PII), that company’s insurance may provide you with some financial assistance. However, it’s up to you to pay attention to cyber breach notifications you receive in the mail and determine which company to hold accountable for your compromised data. 

Many credit card companies will remove fraudulent charges, so it's important to review your credit card and bank account activity frequently. Alert the institution if you see unfamiliar debits or credits.

You can also ask your insurance professional about adding an ID theft or personal cyber component to your homeowners, condo or renters insurance policy. It can help pay to restore your good credit and clear up problems with property titles, bank accounts, or other accounts set up in your name. It may also pay to monitor the internet and financial system for unauthorized use of your information, so you don’t fall victim to further fraud.

Social media and hijacked email

Social media accounts are notoriously vulnerable to hacking and falsification. These cybercrimes may cause significant problems for you, such as accusations of cyberbullying, libel or fraud. You may be brought into a lawsuit over such allegations and need costly legal representation. 

Additionally, false public statements made about you or in your name could harm your reputation. If your email is hacked and used to commit crimes, you could face substantial costs to end the bogus use and rectify the damages. Some personal cyber insurance policies cover these situations. They may even cover your salary if your income is damaged due to cyberbullying or fraud.

Cyber extortion

In some cases, cybercriminals access your computer files or other digital PII and extort money to prevent the release of that data. In other cases, hackers infiltrate your home computer or mobile device and lock it down until you pay a ransom.

The costs of paying the ransom, investigating the crime and rectifying the damage may be covered under personal cyber insurance. For high-net-worth individuals, this coverage is essential.

Protect yourself

While cybercrime isn’t going away any time soon, there are steps you can take to minimize your chances of loss.

• Establish strong passwords for your online accounts, using the maximum number of characters to make them hard to crack. While it is a pain to set a unique password for each account, do not use the same password for any of them. Instead, use a password manager to auto-populate your stored passwords.
• Carefully examine the spelling of every email or link you receive before clicking it. Hackers often use familiar URLs but add a dash, an underscore or a single letter to get the unwary to click.
• If you receive a request for funds or another unusual request, verify it with the person via a different contact method.
• Check your financial accounts weekly for unauthorized activity.
• Do not use public Wi-Fi. Use a mobile phone hotspot if you can.
• Use pop-up blockers to minimize the potential for an accidental click on a malicious site.
• Use encrypted email to minimize the effectiveness of spyware.
• Allow software updates and install all security patches your providers issue.
• Freeze your credit with each of the credit bureaus: TransUnion, Equifax and Experian. This will prevent fraudsters from taking out lines of credit in your name.

Finally, discuss personal cyber insurance with your Rathbun Insurance Producer, so you have the fullest protection for your assets and reputation.